On this Friday of a rather tension filled week here in the United States, Supply Chain Matters wanted to briefly revisit some of other prior blogs because of noteworthy new developments.
Last week there was a remarkable development involving Tesla Founder and CEO Elon Musk. In the middle of a Q&A discussion on Twitter, Musk was asked by a follower: How close was Tesla from bankruptcy when the challenging Model 3 production ramp-up was occurring.
Musk’s reply as reported by Business Broadcasting Network CNBC was:
“Closest we got was about a month. The Model 3 ramp was extreme stress and pain for a long time- from mid-2017 to mid-2019. Production and logistics hell.”
From our lens, such a casual revelation on a social media platform is mind blowing, but this is Elon Musk that we are talking about.
As CNBC noted in its report:
“Musk has often spoken about what he calls the “production and logistics hell” of taking a new electric vehicle into high volume manufacturing. However, Musk and the company had never disclosed exactly how little runway they had before facing a possible bankruptcy.”
The Supply Chain Matters blog has provided multiple blog commentaries over these months related to the Tesla Model 3 ramp-up challenges and we at times did not mince words in describing Musk’s tendencies to constantly over promise and under deliver in terms of setting and fulfilling operational objectives.
We went so far as to state that Tesla needed to recruit an external experienced automotive manufacturing and supply chain leader who could challenge the company’s inward facing we have the answer culture and provide the leadership needed to recognize what really needed to be done to make the Model 3 ramp-up milestones occur.
One wonders if the SEC will take kindly to this latest Twitter based revelation.
Readers are welcomed to review all of our prior commentaries focused on the operational and management challenges related to the Model 3 ramp-up in the 2018-2019 period, which were many. Perform a search of our content with the terms “Tesla supply chain” to get a flavor of such themes.
Behind the scenes, this Editor wondered how long the company could sustain financially given the under performance, as well as the growing executive turnover.
Truth be disclosed to our readers, blogging about Tesla’s operations and supply chain performance provides its own rewards in reader uptake. It appears that there is indeed an insatiable appetite for all opinions related to Tesla’s performance and future. The rewards keep coming back in Google search links.
From our lens, Tesla’s original staffers and manufacturing employees were the ones that went the extra mile at the end of each quarter to make the production numbers happen in spite of incredible challenges and obvious stretched expectations communicated to investors during the 2018-2019 period.
As the CNBC report points out, in addition to the yeoman efforts of employees, and the timely opening of the new Shanghai China facility, Tesla has now reported its fifth consecutive quarter of profitability thanks in part to timely sales of regulatory credits accumulated. Tesla stock has also skyrocketed in value, fulfilling the role of the darling of Wall Street.
At last week’s same Twitter session, Musk was asked to comment on his 2018 Agreement to remain Tesla’s CEO working for no salary, but instead being granted shares to buy company stock at locked-in prices if the company met certain milestones. Noted in the report:
“Musk has earned several tranches of this compensation package worth more than $11 billion as the coronavirus pandemic raged. At the same time, Tesla has slashed employee pay, furloughed workers and told factory workers to come back to build cars in Fremont, California, before the state and county had deemed it safe to do so.”
So is the saga of Tesla where a brilliant inventor and innovator with a persona of large social-media followers gets to determine his own perceptions of on the ground reality.
Does that sound familiar?
Bob Ferrari
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